Correlation Between HUMANA and Goliath Film

Can any of the company-specific risk be diversified away by investing in both HUMANA and Goliath Film at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining HUMANA and Goliath Film into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HUMANA INC and Goliath Film and, you can compare the effects of market volatilities on HUMANA and Goliath Film and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HUMANA with a short position of Goliath Film. Check out your portfolio center. Please also check ongoing floating volatility patterns of HUMANA and Goliath Film.

Diversification Opportunities for HUMANA and Goliath Film

0.45

Correlation Coefficient

HUMANA  Goliath Film

Very weak diversification

The 3 months correlation between HUMANA and Goliath is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding HUMANA INC and Goliath Film and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goliath Film and HUMANA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HUMANA INC are associated (or correlated) with Goliath Film. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goliath Film has no effect on the direction of HUMANA i.e., HUMANA and Goliath Film go up and down completely randomly.

Pair Corralation between HUMANA and Goliath Film

Assuming the 90 days trading horizon HUMANA INC is expected to generate 0.14 times more return on investment than Goliath Film. However, HUMANA INC is 7.25 times less risky than Goliath Film. It trades about -0.18 of its potential returns per unit of risk. Goliath Film and is currently generating about -0.06 per unit of risk. If you would invest  8,427  in HUMANA INC on September 22, 2024 and sell it today you would lose (732.00) from holding HUMANA INC or give up 8.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

HUMANA INC  vs.  Goliath Film and

HUMANA INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Goliath Film

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goliath Film and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with HUMANA and Goliath Film

The main advantage of trading using opposite HUMANA and Goliath Film positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HUMANA position performs unexpectedly, Goliath Film can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Goliath Film will offset losses from the drop in Goliath Film's long position.

The idea behind HUMANA INC and Goliath Film and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.